State of Alabama

A business license is required for basically everyone engaged in business within the state. The state and county licenses are issued by the county Probate Judge or License Commissioner in the county where the business is located. The county then remits a portion of the license fees to the state. The Alabama Department of Revenue does not administer municipal licenses. The state has a helpful, quick reference guide, found here.

Jefferson County

All entities within Jefferson County are responsible for a Business License Tax, which is based on gross receipts – 1/40^th of 1% and is computed based on the prior year’s receipts – most use the receipts reported on the prior year’s tax return even though calendar year. Licenses are issued for the fiscal year, which starts on October 1^st and runs through September 30^th.

All counties within the state have a business license requirement. Click here to see the link for a rundown by county.

Cities

Most cities located within Jefferson County require a separate business license. If you don’t think you need a license and/or permit, you’re probably wrong. Make certain the reported business license code is correct. An error could result in overpaying license fees.

Licenses are renewed annually. The fees are generally a flat fee or minimum plus some percentage of gross receipts. In some cases, a permit may also be required.

If you operate in a municipality and are uncertain if you have the correct licenses, visit their website or call.

Counties and cities are aggressively looking for businesses without licenses. Short on labor, some contract with 3^rd party vendors to locate noncompliant businesses.

Caution

Make certain you are filing (and paying) in the correct jurisdiction. Property can be annexed into a municipality with only legal notice to the general public.  Jefferson County has Municipality Look-Up on its website here.

If you have specific questions, please give us a call.